Pakistan government is mulling raising the Petroleum Development Levy (PDL) on petrol and diesel from Pakistani Rupees (PKR) 50 to PKR 55 per litre with effect from 1 July 2023, Pakistan-based The News International reported.
Meanwhile, Pakistan’s Ministry of Finance has informed the Senate Standing Committee on Finance that the petroleum development levy was worked at PKR 60 per litre for accomplishing its target of PKR 879 billion in the next fiscal year, against the revised target of PKR 542 billion for the outgoing financial year 2022-23 which is due to end on 30 June, The News International reported.
The Pakistan government’s consideration of increasing the PDL on petrol and diesel raises questions on whether the government has received the Memorandum of Economic and Financial Policies (MEFP) for the fresh bailout package under the Standby Arrangement (SBA) programme for the next six to nine months. The staff-level agreement could not be signed without a broader agreement on MEFP.
Pakistani authorities have said that the two sides exchanged draft MEFP several times. However, it was not yet clear whether it was regarding the ninth review of the expiring Extended Fund Facility or the fresh SBA programme, according to The News International report.
Through the Finance Act 2023-24, Pakistan’s government sought powers for amendment of the Petroleum Products (Petroleum Levy) Ordinance, 1961 (XXV of 1961) in the Fifth Schedule, in column (1). Earlier, the Pakistan government needed the parliament’s consent to fix the maximum limit of petroleum level, The News International reported.
The development comes amid the Pakistan government’s hope of clinching the International Monetary Fund (IMF) agreement on a fresh Standby Arrangement (SBA) for six to nine months.
On Tuesday, Pakistan and International Monetary Fund (IMF) held consultations to take a final decision on two options. With diminishing chances for achieving the ninth review under the USD 6.5 billion EFF program scheduled to end on Friday, Pakistan and the IMF will have to enter a fresh bailout package under the SBA programme of USD 2.5 billion for the next six to nine months.
Earlier on Tuesday, Shahbaz Sharif spoke to the IMF chief over the phone after meeting her thrice from Thursday to Saturday. During the telephonic conversation, the IMF chief acknowledged Pakistan’s Finance Minister Ishaq Dar and his team’s efforts for attempting to revive the loan after policy matters were discussed in Paris, The News International reported.
Furthermore, the Pakistan PM’s Office released a statement that the IMF chief and Shehbaz Sharif discussed matters related to the stalled bailout programme, the report said. Pakistan’s PM expressed hope that coordination on the points of the bailout programme would result in the IMF’s decision in a day or two.